President Clinton announced Sept. 12 that the Department of Housing and Urban Development (HUD) soon will be paying more to enable housing welfare recipients to live in fancier apartments. Mr. Clinton declared that the HUD decree boosting Section 8 rental subsidy levels by up to 25 percent will "give voucher holders more choice and mobility than they have under current regulations."

The move is being hailed as a compassionate response to the crunch facing low-income renters. But no attention is being paid to how HUD's program hurts the poor and deters people from leaving the welfare rolls.

From the start of the Clinton administration, HUD has used Section 8 as a wrecking ball to inject welfare recipients into middle-class and upper-middle-class areas. In 1993, HUD Secretary Henry Cisneros called economic integration an "overarching objective," and, as The Washington Post noted, he "ordered his agency to advance economic integration at every opportunity." Spending for Section 8 has doubled since Mr. Clinton took office, reaching $15 billion this year.

Section 8 entitles low- to moderate-income people to live in the nation's most exclusive locales. HUD will pay up to $1,680 a month for welfare recipients to live on the island of Maui, Hawaii; $1,858 a month for the island of Nantucket, Mass.; $1,828 a month in San Miguel County, Colo. (the home of Telluride and a favorite haunt of rich Hollywood stars); and $2,118 a month in San Francisco and Marin County, Calif. Any family or person with less than 80 percent of the median income for their area is eligible for Section 8.

But Mr. Clinton's HUD recently discovered a serious problem with Section 8 subsidy levels. They aren't high enough. So HUD will authorize subsidy levels 25 percent higher than the previously established levels in hundreds of locales across the country.

Thanks to HUD's compassion, the top rent HUD will pay just rose to $1,772 for the D.C. area. HUD is jacking up subsidy levels even though it admitted in 1997 that Section 8 rents averaged almost 50 percent higher than the rent of similar unsubsidized Washington apartments. For San Jose, Calif., HUD will now pay a rental subsidy of up to $2,518 per lucky family.

These subsidy levels far exceed what working class and many middle-class Americans can afford. Yet, HUD perceives the lavish subsidies as a triumph for social justice or at least a triumph for letting government workers pick winners and losers in American life.

Section 8 is not a formal entitlement program that guarantees benefits to anyone below specified income limits: The number of vouchers is limited by congressional appropriations. Section 8 has perpetually been wracked by fraud. In the District of Columbia between 1990 and early 1994, 98 percent of all Section 8 certificates were awarded as a result of bribes. In San Francisco, a federal trial is ongoing of housing administrators. One housing department "relocation specialist" bluntly described her job in court last month: "I sold Section 8" to people willing to pay kickbacks to get the subsidy.

HUD's handouts tilt the rental market against the self-reliant. The more HUD gives to favored welfare recipients, the more difficult the housing market becomes for all low-income unsubsidized renters. One HUD study concluded that Section 8's lavish subsidies could be inflating rents for unsubsidized tenants.

Section 8 requires beneficiaries to pay 30 percent of their income toward rent. Many housing authorities make little or no effort to check recipients' incomes. However, insofar as recipients are compelled to pay 30 percent of their income toward rent, Section 8 becomes the equivalent of a super tax that discourages welfare recipients from getting off the dole.

Mr. Clinton is pushing Congress to spend $690 million in next year's budget for 120,000 new housing vouchers. HUD Secretary Andrew Cuomo warns: "We have the greatest need for affordable housing in history." The more lavish the apartments that Section 8 will bankroll, the more people sign up for Section 8 waiting lists. Thus, the more generous the program becomes, the worse the housing crisis appears to be.

HUD has been messing up the nation's housing markets for more than a third of a century. There is no evidence the agency is corrigible. HUD headquarters should be razed the same way that so many crime-ridden public housing projects across the nation are now being demolished.

James Bovard is the author of the just-published "Feeling Your Pain: The Explosion & Abuse of Government Power in the Clinton-Gore Years" (St. Martin's Press).